Hydrothermal carbonization of biogas slurry and animal manure into hydrochar could enhance waste recycling waste and minimize ammonia (NH3) volatilization from paddy fields. In this study, cattle manure-derived hydrochar prepared in the presence of Milli-Q water (CMWH) and biogas slurry (CMBSH), and biogas slurry-based hydrochar embedded with zeolite (ZHC) were applied to rice-paddy soil. The results demonstrated that CMBSH and ZHC treatments could significantly mitigate the cumulative NH3 volatilization and yield-scale NH3 volatilization by 27.9–45.2% and 28.5−45.4%, respectively, compared to the control group (without hydrochar addition), and significantly correlated with pH and ammonium–nitrogen (NH4+–N) concentration in floodwater. Nitrogen (N) loss via NH3 volatilization in the control group accounted for 24.9% of the applied N fertilizer, whereas CMBSH- and ZHC-amended treatments accounted for 13.6−17.9% of N in applied fertilizer. The reduced N loss improved soil N retention and availability for rice; consequently, grain N content significantly increased by 6.5–14.9% and N-use efficiency increased by 6.4–16.0% (P < 0.05), respectively. Based on linear fitting results, NH3 volatilization mitigation resulted from lower pH and NH4+–N concentration in floodwater that resulted from the acidic property and specific surface area of hydrochar treatments. Moreover, NH3-oxidizing archaea abundance in hydrochar-treated soil decreased by 40.9–46.9% in response to CMBSH and ZHC treatments, potentially suppressing NH4+–N transformation into nitrate and improving soil NH4+–N retention capacity. To date, this study applied biogas slurry-based hydrochar into paddy soil for the first time and demonstrated that ZHC significantly mitigated NH3 and increased N content. Overall, this study proposes an environmental-friendly strategy to recycle the wastes, biogas slurry, to the paddy fields to mitigate NH3 volatilization and increase grain yield of rice.